It takes a lot of resources to properly run a business. It takes time, effort, dedication, organization…and money.
Businesses are constantly looking for ways to save money and add to the bottom line. While it is important to keep costs down, it’s also important to have some money saved in case certain situations arise.
This money can be referred to as a “nest egg”. It’s a sum of money that the business does not touch and saves in case something comes up. It could be an emergency situation, or a chance to invest in an incredible piece of technology. Either way, it’s there to help bail the business out of a financial crunch if need be.
So, why should businesses start saving money to put into a nest egg? What reasons could they need the extra money for? Here are 10 situations that could cause a business to dip into its nest egg money, and why it’s important to have a nest egg in the first place.
Building Repairs
If you own your own building, there will come a time where you need to make building repairs. If you rent office space, there still may be a time or two where you have to chip in for building repairs. Either way, businesses should be saving money for this expense.
These kinds of repairs could be small, such as mending a hole in a wall or fixing a lock on a door. However, small repairs can add up quickly if you aren’t careful. There’s also the chance your building needs some major work done to it. This kind of work includes roof repairs, water damage repairs, and even replacing inadequate windows and doors. These larger repairs could make a big impact on your bottom line if you aren’t prepared. That’s where the nest egg comes into play. You could use some of the money to alleviate some of the repair costs.
You can also use this nest egg for any extra maintenance work that needs to be done. This can include carpet cleaning, window washing, and floor waxing. And if you happen to have a pest problem, you can use the money to hire pest control services.
If you haven’t yet, start saving money in case large repairs need to be made. Best case scenario: you have a nice nest egg that you may not have to use after all. Worst case scenario: you do have to use the nest egg for repairs, but you’re prepared for it.
Office Upgrades
Your office space will eventually need an upgrade. As times change, your business will change. You may need more desks, a bigger meeting room, or have to create a break room that has a full refrigerator and portable fridge freezers. It’s important to plan for these kinds of necessary office upgrades. Saving money now will help you offset some of these costs when the time comes to upgrade. If you’re renting your office space, talk to your property management company and see how much certain upgrades would cost.
If your employees have company cell phones and/or computers, remember that those will need to be upgraded at some point too. Your company and your employees need to stay up-to-date with technology so that business runs smoothly. You wouldn’t want your sales person to walk into an important meeting and present a big pitch on a 15 year old laptop, would you? It could make the company look outdated and limit the abilities of your employees.
There are other things in the office that will eventually need upgrading as well. Desks, office furniture, and essential office equipment will need to be replaced on day. It’s better to plan ahead for it now than be shocked by the bill later on.
Technology Investment
It seems like technology upgrades in the blink of an eye these days. You may buy the latest version of a computer only to have it be considered “outdated” within two months. If you want your business to stay up-to-date with technology, set aside some money for technology upgrades.
You never know what technology could be built within the next few years. There could be a piece of technology that revolutionizes your industry, and it could really help your business thrive. Wouldn’t you like to know that you have the money set aside in case you want to invest in it?
Start saving money specifically for technology investment. This nest egg could help you make incredible business moves if invested wisely. Remember to do your research when looking into types of technology to invest in. Identify trends in your industry, and how you can capitalize on those trends using technology. If there’s something out there that helps you do an essential function more effectively, then seriously consider investing in it. If it helps your business grow, it’s worth looking into.
Security Upgrades
You may think your office is tightly secured, but is it really secure on all fronts?
Your office space is full of valuable things, including computers and other pieces of equipment. There are also important files in your building. You may have files on your employees and your clients that contain sensitive information. You don’t want that information to get into the wrong hands, so it’s important to have a good security system in place.
If you don’t have a security system in place, you should start saving money for one. This system can be as simple or as complex as you want. It could be a couple security cameras around the building, or a brand new system where employees only get access to the building if they have a key card. You could even hire a security guard or two to help keep the building secure.
It’s also important to consider investing in your company’s cyber security. An estimated 43% of cyber attacks target small businesses, and the average cost of a data breach will exceed $150 million this year. Falling victim to a cyber attack could derail any progress your business has made. It could hurt your finances and your reputation among customers.
You could start saving money today and put it towards a comprehensive security system that protects your employees and customers on all fronts. The last thing you want to do is leave them vulnerable to any attacks.
Natural Disaster Preparation
You never know when a natural disaster will hit your area. A natural disaster could cause some serious damage to your building and put you out of business for some time.
No business is disaster-proof. Start saving money now in case your area is hit with a natural disaster like a flood, hurricane, or tornado. These natural disasters could damage your office, which you’ll need to repair. Your nest egg may not cover all the repairs, but it will at least help a little.
Legal Fees
There are a lot of legal aspects to owning a business, and there could be times you need a lawyer. You could use your nest egg as a fund for any legal fees your business could have in the future.
Your business may not necessarily need a criminal defense attorney in the future. There are different kinds of lawyers for different situations. There are employment lawyers, who provide advice on legal issues stemming from an employment contract or within an employment relationship. Tax lawyers give advice on specific tax issues you may face at the local, state, or federal level. These situations aren’t criminal in nature, but do require someone with legal knowledge to advise what to do.
Legal fees can put a dent in your bottom line, especially if a case is drawn out over several months. If you have a nest egg set up, you could tap into it to help pay legal fees.
Travel Expenses
There may be quite a bit of travel involved with your business. You and your colleagues could travel for important meetings and conferences across the world. Traveling isn’t cheap, though, so you should be saving money to help pay for travel expenses.
Travel expenses include the flights you book with airlines, lodging, and car rental expenses. They can also include the money you spend on food while on your trip. While these expenses may not seem like much, they can add up. If you or your employees go over budget on a work trip, it could cause some headaches.
If you have a nest egg, you can tap into it if your travel expenses exceed budget. Better to be safe than sorry, right?
Extra Advertising And Marketing
Advertising and marketing is a huge part of your business. Good advertising and marketing will tell your brand’s story in an authentic and captivating way. This story should resonate with your target audience, and hopefully, they turn into customers.
Effective advertising and marketing is crucial for a modern business’ success. That’s why it’s important to explore all advertising and marketing options, which includes looking at platforms like Facebook, Google, and YouTube as valuable places to acquire new customers.
Advertising and marketing can get expensive, though. If you want to do it right, you could hire an agency to either plan your campaigns or provide feedback on your current campaigns. More businesses are turning to social media marketing services to help with their marketing efforts. More business are also investing in their organic visibility online. 14 million small businesses in the United States have invested time and money into SEO because they see it’s value.
You could use money in your nest egg to invest in these kinds of marketing services. You may already have a set budget for advertising and marketing, but if your strategy isn’t working, you end up wasting money. If you can invest in services that will help your business grow, why not do it?
Event Planning
A great event will leave a big impression on employees and customers alike. You can start saving money today and put it towards planning events that help your business grow.
Statistics show that 87% of C-suite executives believe in the power of live events and plan on investing in them more in the future. They also show that a whopping 70% of users become regular customers after an experiential marketing event. We live in a social media-driven world where people want to document their experiences for the world to see. If you put on a great event, people will come to it. Planning a great event takes time and budget, though. If you don’t have an event budget, consider borrowing money from your nest egg to plan an event that converts strangers to customers.
You could also use some of your nest egg money to plan an appreciation event for current customers and employees. A company’s reputation is crucial to its success. A great way to build your reputation is to show how much you care about your employees and customers. You could plan an appreciation dinner for your employees and a mingle event for your customers. These kind of events will make you stand out as a brand.
Business Expansion
One of the biggest reasons you should be saving money now is because you may need to expand your business sooner than you think.
Expanding your business means getting a larger office space, hiring more people, and investing in more equipment. Are you in the right financial place to manage this kind of expansion? If not, setting up a nest egg as soon as possible can help. If you can’t save up enough money right away, you can look into obtaining small business loans to help finance your business expansion.
Running a business can often seem like a big numbers game. You’re constantly comparing profits and expenses to figure out where you can save money in the long run. It’s important that you never underestimate the importance of a nest egg, though. Having a nest egg can help bail your business out of some tough financial situations, or give you the chance to invest in something that helps your business grow.
You never know what could be waiting just around the corner. You don’t want to be unprepared, right? If not, start saving money for your nest egg today. You may be incredibly grateful for it down the road.
